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Sydney home values haven’t seen a decrease since January 2023, but new market dynamics have caused a slight change this spring.
According to CoreLogic’s latest Home Value Index, Australian homes recorded a small monthly increase in value of 0.3 per cent over the course of October, driven by remarkable strength in the mid-sized capitals.
But results were decidedly mixed across the nation’s major cities, with some of the biggest markets contending with a change in the relationship between supply and demand.
Sydney dwelling values, for example, dropped back 0.1 per cent over the month. It may be a marginal shift, but this is the first time that the major city has experienced a decrease since January 2023, when prices began to rise again after an 11-month downswing.
Over that period, values fell 12.4 per cent in the city as a reaction to the RBA’s rate tightening cycle. But they weren’t to be kept down for long, having been on a steady upward trajectory for the past 20 months.
Digging deeper into the data, CoreLogic reported that the city’s weaker conditions were actually driven by the most expensive areas of the market, with a -0.6 per cent fall in upper quartile house values over the month and a -1.1 per cent drop over the past three months. At the lower end of the market, house and unit values in the harbour city both recorded a half a per cent rise in values in October.
Tim Lawless, CoreLogic’s research director, attributed the stronger conditions across the lower value cohorts to “a combination of less borrowing capacity and broader affordability challenges, as well as a higher-than-average share of investors and first home buyers”.
He also commented that across the country as in Sydney, a higher than average increase in listings was contributing to price shifts.
“Total listings are now 13.2 per cent above the previous five-year average in Sydney and 13 per cent higher in Melbourne,” he said, noting that buyers in these markets were enjoying more choice and therefore more leverage.
Continuing on its current trajectory, Melbourne saw a drop in values of 0.2 per cent over the month. Darwin values declined 1 per cent, and Canberra values fell 0.3 per cent.
But offsetting these results were Perth, Adelaide and Brisbane, where sustained interest continued to drive up the average cost of buying a home, though at a slower pace than witnessed at the start of the year.
Western Australia’s capital continues to lead the nation with a 1.4 per cent rise in the value of Perth homes over the month, though that is well down from the growth seen over February to June when monthly gains were averaging more than 2 per cent.
Adelaide values have risen by more than 1 per cent each month since March, but October’s 1.1 per cent gain was the lowest monthly rise since June. Similarly, Brisbane’s monthly gain of 0.7 per cent was the lowest since July.
Lawless explained that while it may seem these markets are running at different speeds to some of the larger cities, the increase in supply was also having an effect here, but masked by historic low stock.
“Despite the rise in listings across the mid-sized capitals, Perth, Adelaide and Brisbane are still seeing advertised stock levels more than -20 per cent below the five-year average for this time of the year. These markets remain well and truly in favour of sellers, although the balance is starting to gradually improve,” he said.
ABOUT THE AUTHOR
Juliet Helmke
Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.
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